This article, from law firm Mintz Levin Cohn Ferris Glovsky and Popeo PC, is authored by R. Neal Martin.
Senate Finance Committee Ranking Member Ron Wyden (D-OR) recently introduced the “Clean Energy for America Act,” which aims to create a new technology-neutral system for federal tax credits for clean energy, clean fuel, and energy efficiency projects. The bill would offer performance-based tax incentives for efficient homes and office buildings, and would significantly reduce carbon pollution over the next decade. Senator Wyden, also a member of the Energy & Natural Resources Committee, received support from 21 Democrat co–sponsors, including Senate Minority Leader Chuck Schumer (D-NY) and Energy and Natural Resources Committee Ranking Member Maria Cantwell (D-WA).
As Congress considers tax reform and infrastructure investments, Senator Wyden’s bill addresses the need to combat climate change and promote clean energy in the United States. According to Senator Wyden, the current system of energy incentives lacks efficiency, with 44 different energy tax incentives overcomplicating the process. Many of these current incentives do not last long enough to stimulate investments and there are also concerns by some about the policy of giving different subsidies to different types of technology.
The Clean Energy for America Act proposes a significantly simpler set of performance-based tax incentives that promote long–term energy investments and create a technology-neutral system. Taxpayers would have the ability to choose between a production tax credit (PTC) and an investment tax credit (ITC), based on the carbon emissions of electricity generated. Incentives for clean electricity, clean transportation fuel, and energy conservation would all be performance-based, with larger credits going to cleaner facilities, cleaner fuel, and more efficient buildings. Nearly all existing energy tax incentives would be consolidated into these three categories, with appropriate transition relief. These provisions are long-term, but not permanent, as the incentives would phase out once greenhouse gas emissions have been reduced by 35%.
“This bill is built around the proposition that the law ought to reward innovative energy technologies with incentives that spark investment in the private economy,” said Senator Wyden. “These investments will shrink electric bills for American families and create new clean energy jobs in Oregon and across the country.”
Filed Under: Policy